Innovations and Industry Growth

Jati K. Sengupta

Chapter 2 in Technology, Innovations and Growth, 2011, pp 23-54 from Palgrave Macmillan

Abstract: Abstract Economic efficiency is the key to the growth of an industry. It may take different forms. Productivity gains, unit cost reduction, quality improvement of inputs and outputs and the diversity of output are some of these forms. In the short run a firm operates with a fixed stock of capital. Hence it can reduce unit costs and therefore prices by adopting optimal input and output strategies. In the long run however capital stocks are variable. Investment in capital stocks and innovations then provide the key to efficiency gains through cost reductions, quality improvement and external economies.

Keywords: Foreign Direct Investment; Capital Stock; Spillover Effect; Physical Capital; Creative Destruction (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-29525-4_2

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DOI: 10.1057/9780230295254_2

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